Renault was punished in the markets today on reports that French anti-fraud agents raided several of the carmaker’s offices, apparently targeting production sites responsible for standards testing and engine certifications. Investors took this to mean that the carmaker might be facing an emissions-testing scandal like the one that has engulfed Volkswagen.
Heavy selling pushed Renault’s shares down by around 20% at one point, before they bounced back but remained around 10% lower on the day.
Renault later said in a statement that agents from the economy ministry’s fraud office visited to follow up on investigations into whether French automakers were deliberately thwarting emissions tests like Volkswagen. European officials been on high alert since September, when the news of Volkswagen’s emissions-rigging software—otherwise known as a “defeat device,” which makes the engine perform differently in laboratory testing that it does on the open road—first came to light thanks to US regulators.
The appearance of anti-fraud agents at company sites was intended to “definitively confirm the first findings resulting from the analysis of the independent technical commission,” Renault said. This special commission set up by the French government to probe local automakers has already tested a handful of Renault models and “considers that the on-going procedure would not reveal the presence of a defeat device on Renault’s vehicles,” the statement said. “This is good news for Renault.”
Investors aren’t so sure. Although their initial panic subsided later in the day, they remain on edge—after all, Volkswagen has seen billions of euros vaporized from its market value as it faces a seemingly endless series of lawsuits, fines, and other penalties for cheating on emissions tests.